When will shutdown harm defense firms?

Economists say an extended impasse would hurt the industry

Northrop Grumman's RQ-4 Global Hawk unmanned aerial vehicle has a 12,000 mile range, and can reach altitudes of 65,000 feet. The drone is largely developed at the company's San Diego-area facilities.
— Northrop Grumman

Northrop Grumman's RQ-4 Global Hawk unmanned aerial vehicle has a 12,000 mile range, and can reach altitudes of 65,000 feet. The drone is largely developed at the company's San Diego-area facilities.
/ Northrop Grumman

The government shutdown continued to reverberate Thursday in San Diego County — among the tens of thousands of furloughed workers in federal offices, the 15 now-idled employees who serviced campgrounds in the Cleveland National Forest and the many defense contractors trying to gauge when their operations would be disrupted.

Federal campgrounds in the Cleveland forest are now off-limits to the public, including at the Laguna and Burt Rancheria campgrounds.

Warren Meyer, who heads the company that operates those two campgrounds and many more across the western United States for the government, lashed out at the Obama administration about the closures.

“I urge you to help stop the administration from lawlessly taking arbitrary and illegal actions to artificially worsen the shutdown by hurting innocent hikers and campers,” he wrote in a letter to some congressional representatives.

His company, Recreation Resource Management, is funded entirely through user fees and doesn’t take any federal funds. It employs 15 people who service the two Laguna campground sites, and all of those workers have been sidelined during the shutdown, he said during a phone interview from Arizona.

She has been fielding about 25 calls a day from people asking whether the state park, which is south of Julian, is still open despite the federal shutdown.

“We’re probably going to be full because of the overflow,” Jones said. “We’ll probably get a lot of Mt. Laguna people.”

She said reservations at Cuyamaca’s two campgrounds are full for this weekend, and some spots remain for the next few weekends.

Calls to Palomar Mountain State Park, another popular site for camping, were not returned Thursday.

Meanwhile, defense contractors that employ thousands of workers across San Diego County are keeping a close eye on the federal government shutdown, but aren’t likely to make major staffing changes unless the impasse lingers, according to company representatives and two San Diego economists.

“At this time, we’re not experiencing any hiring freezes or furloughs,” said John Measell, a spokesman for BAE. “Should this (shutdown) get protracted, that could change.”

The same goes for the more than 3,000 workers at General Dynamics NASSCO, which handles both Navy and commercial projects. The shipbuilder plans to expand rather than shrink its workforce because it recently finalized some contracts, a company spokeswoman said.

Even a small impact on the defense industry could make waves across the region. The county’s top 10 private defense firms together bring in more than $6 billion annually in federal contracts.

If federal dollars stop flowing for an extended period, the defense contracting industry could be in for a “big impact,” said Alan Gin, an associate professor of economics at the University of San Diego.

“Businesses are concerned about uncertainty,” Gin said. “The hiring plans would be curtailed.”